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Chapter 12

Social Problems Chapter 12 [COMPLETE] Notes - I 4.0ed this course

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12.1 Overview of the Economy • Sociologists define economy as the social institution that organizes the production, distribution, and consumption of a society's goods and services. The economy is not the same as government, which is the social institution through • which power is distributed and exercised. • The economy is composed of 3 sectors: • The primary sector is the part of the economy that takes and uses raw materials directly from the natural environment. Its activities include agriculture, fishing, forestry, and mining. • The secondary sector of the economy transforms raw materials into finished products and is essentially the manufacturing industry. • The tertiary sector is the part of the economy that provides services rather than products; its activities include clerical work, health care, teaching, and information technology services. • Generally speaking, the less developed a society's economy, the more important its primary sector; the more developed a society's economy, the more important its tertiary sector. • As societies developed economically over the centuries, the primary sector became less important and the tertiary sector became more important. Types of Economic Systems • Capitalism and Socialism Capitalism • Capitalism is an economic system in which the means of production are privately owned. By means of production, we mean everything—land, tools, technology, and so forth—that is needed to produce goods and services. • the most important goal of capitalism is the pursuit of personal profit • Businesses try to attract more demand for their products in many ways, including lowering prices, creating better products, and advertising how wonderful their products are. In capitalist theory, such competition helps ensure the best products at the lowest prices, again benefiting society as a whole. Such competition also helps ensure that no single party controls an entire market. • According to Smith, the competition that characterizes capitalism should be left to operate on its own, free of government intervention or control. For this reason, capitalism is often referred to as laissez-faire (French for “leave alone”) capitalism, and terms to describe capitalism include the free-enterprise system and the free market. • The hallmarks of capitalism, then, are private ownership of the means of production, the pursuit of profit, competition for profit, and the lack of government intervention in this competition. Socialism • Socialism is an economic system in which the means of production are collectively owned, usually by the government. The most important goal of socialism is not the pursuit of personal profit but rather • work for the collective good: The needs of society are considered more important than the needs of the individual. Because of this view, individuals do not compete with each other for profit; instead they work together for the good of everyone. If under capitalism the government is supposed to let the economy alone, under socialism the government controls the economy. • The ideal outcome of socialism, said Marx, would be a truly classless or communist society. In such a society all members are equal, and stratification does not exist. Comparing Capitalism and Socialism •It produces greater economic growth and productivity, at least in part because it provides more incentives (i.e., profit) for economic innovation. It also is often characterized by greater political freedom in the form of civil rights and liberties. •There is much more economic inequality in capitalism than in socialism. Although capitalism produces economic growth, not all segments of capitalism share this growth equally, and there is a much greater difference between the rich and poor than under socialism. People can become very rich in capitalist nations, but they can also remain quite poor. •More generally, capitalism is said by its critics to encourage selfish and even greedy behavior: If individuals try to maximize their profit, they do so at the expense of others. In competition, someone has to lose. Democratic Socialism • Some nations combine elements of both capitalism and socialism and are called social democracies, while their combination of capitalism and socialism is called democratic socialism. In these nations, which include Denmark, Sweden, and several other Western European nations, the government owns several important industries, but much property remains in private hands, and political freedom is widespread. The governments in these nations have extensive programs to help the poor and other people in need. Although these nations have high tax rates to help finance their social programs, their experience indicates it is very possible to combine the best features of capitalism and socialism while avoiding their faults The US Labor Force • The civilian labor force in the United States consists of all noninstitutionalized civilians 16 years of age or older who work for pay or are looking for work. • Approximately 87 million Americans ages 16 and older are not in the labor force. Of this number, 93 percent do not desire a job. Most of these individuals are retired, disabled, or taking care of children and/or other family members. Of the 7 percent who would like a job but are still not in the labor force, most have dropped out of the labor force (stopped looking for a job) because they have become discouraged after previously looking for work but not finding a job. 12.2 Sociological Perspective on Work and the Economy • Functionalism - Work and the economy serve several functions for society. The economy makes society possible by providing the goods and services it needs. Work gives people an income and also provides them some self- fulfillment and part of their identity. • Conflict Theory - Control of the economy enables the economic elite to maintain their position at the top of society and to keep those at the bottom in their place. Work is often alienating, and the workplace is often a site for sexual harassment and other problems. • Functionalism: •Work has important, nonmaterial functions beyond helping us pay the bills. Many people consider their job part of their overall identity. •Many people have friends and acquaintances whom they met at their workplaces or [1] at least through their work (McGuire, 2007). Coworkers discuss all kinds of topics with each other, including personal matters, sports, and political affairs, and they often will invite other coworkers over to their homes or go out with them to a movie or a restaurant. These friendships are yet another benefit that work often provides. • Conflict Theory: •Although work can and does bring the many benefits assumed by functionalist theory, work can also be a source of great distress for the hundreds of thousands of women and men who are sexually harassed every year. • In the 2010 GSS, 88 percent of respondents said they are “very” or “somewhat” satisfied with the work they do, and only 12 percent said they were dissatisfied. This latter figure is probably much lower than Marx would have predicted for a capitalist society like the United States. One possible reason for this low amount of job dissatisfaction, and one that Marx did not foresee, is the number of workplace friendships as described earlier. Such friendships can lead workers to like their jobs more than they otherwise would and help overcome the alienation they might feel without the friendships. 12.3 Problems in Work and the Economy The Loss of Jobs and Wages • Even before the deep recession in 2007, there was a loss of jobs and stagnating wages • The US has joined other industrial nations in moving into a postindustrial economy. In a postindustrial economy, information technology and service jobs replace the machines and manufacturing jobs that are hallmarks of an industrial economy. If physical prowess and skill with one’s hands were prerequisites for many industrial jobs, mental prowess and communication skills are prerequisites for postindustrial jobs. • Since the 1980s, many manufacturing companies moved their plants from US cities to sites in the developing world in Asia and elsewhere, a problem called capital flight. Along with the faltering economy, these trends have helped fuel a loss of 5.5 million manufacturing jobs from the American economy since 2000 • A related problem is outsourcing, in which US companies hire workers overseas for customer care, billing services, and other jobs that Americans used to do. China, India, and the Philippines, which have skilled workforces relatively fluent in English, are the primary nations to which US companies outsource their work. • While the average compensation of chief executive officers (CEOs) of large corporations grew by 167 percent from 1989 to 2007, the average compensation of the typical worker grew by only 10 percent The Decline of Labor Unions • Labor strife also marked the Great Depression, when masses of people blamed business leaders for their economic plight. Huge sit-ins and other labor protests occurred at auto plants in Detroit. In response, the Congress passed several laws that gave workers a minimum wage, the right to join unions, a maximum-hour workweek, and other rights that Americans now take for granted. • Labor unions have intensified their efforts to increase their membership, only to find that US labor laws are filled with loopholes that allow companies to prevent their workers from forming a union. For example, after a company’s workers vote to join a union, companies can appeal the vote, and it can take several years for courts to order the company to recognize the union. In the meantime, the low wages, substandard working conditions, and other factors that motivated workers to want to join a union are allowed to continue. • The decline of unions has lowered wages: First, union workers earn about 14 percent more than nonunion workers (controlling for experience, education, occupation, and other factors), a phenomenon known as the union wage premium. Because fewer workers are now in unions than four decades ago, they are less likely to benefit from this premium. Second,
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